High street fashion retailer Dior has arrived at an agreement with the Italian authorities to settle an investigation into the working conditions at its suppliers.
The luxury brand and two of its units have been accused of misleading consumers with their statements about working conditions at its suppliers.
The settlement includes Dior paying 2 million euros ($2.3 million) over five years to support initiatives aimed at helping victims of labour exploitation at its supplier units.
Last year prosecutors in Milan uncovered workshops where underpaid illegal Chinese immigrants, produced leather bags then sold to Dior and Armani for a tiny fraction of their retail price.
This led Italy’s antitrust investigation to open an investigation into whether the luxury brands had misled consumers, focusing on the discrepancies between the reality uncovered by the judicial labour probes and the messages from brands to consumers in terms of craftsmanship and corporate social responsibility.
The Italian antitrust body said on this week that the pledges made by Dior were an appropriate remedy for the possible unlawfulness and decided to close the investigation “without establishing any infringement”.
Among the remedies, Dior also committed to making changes to its ethical and social responsibility statements and to adopt stricter procedures to select and monitor suppliers, the authority said.
“Dior partnered closely with the Authority to define a robust set of commitments that increase transparency and strengthen oversight throughout its supply chain”, the company said in a separate statement.
